Clients often ask us whether they can mention celebrities in their ad campaigns. A recent Seventh Circuit decision in Michael Jordan’s $5 million lawsuit against Jewel-Osco shows just how risky that can be.

To commemorate Jordan’s 2009 induction into the Basketball Hall of Fame, Time, Inc., the publisher of Sports Illustrated, produced a special issue devoted exclusively to Michael Jordan’s career. Jewel Food Stores, Inc., a Chicago-based supermarket chain, ran a full-page ad in the commemorative issue featuring a pair of red, black and white gym shoes, reminiscent of Nike’s Air Jordan I, labeled with Jordan’s famous jersey number, “23.” The ad congratulated Jordan on his accomplishments as a fellow Chicagoan who was “just around the corner” for so many years. The language is significant because Jewel’s slogan is “Good things are just around the corner.” Jordan sued arguing, among other things, that Jewel had misappropriated his identity.

A key issue in the case is whether Jewel’s ad constitutes commercial speech, which is subject to less First Amendment protection. The district court dismissed Jordan’s case, finding that the ad wasn’t commercial because it wasn’t selling a specific product. The Seventh Circuit disagreed, holding that an ad doesn’t have to promote a specific product for it to be commercial. While courts generally define commercial speech as “speech that proposes a commercial transaction,” the Seventh Circuit makes clear that commercial speech is not limited to speech that directly or indirectly proposes to sell products. This category of speech can also include image advertising. Jewel’s ad is a good example. According to the court, the ad aimed to promote “goodwill for the Jewel-Osco brand by exploiting public affection for Jordan at an auspicious moment in his career.” The ad broadly promoted Jewel’s stores, in general, and the use of the company’s slogan in the congratulatory message “only makes sense if the aim is to promote shopping” at the stores.

Be careful about mentioning celebrities in ads, unless you have agreements with them. Remember that companies pay celebrities a lot of money for the right to associate themselves with the celebrities. If you don’t pay a celebrity in the form of an endorsement fee, you may end up paying them more in the form of legal damages.

New Decision Highlights Risks of Using Celebrities in Ads